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Felipe Montoro Jens Weighs In On The BNDES Deal

Many municipalities of Brazil are collaborating with private companies to provide utilities with the BNDES program. Water is especially important since adequate drinking water is scarce in certain parts of the country. Felipe Montoro Jens had written a guest article for the Tierra magazine, influencing the user’s opinion on private and state entities collaborating.

90% of the utilities provided to Brazilians are done so through government organizations. The public sector is obviously very important, but there are some neglected areas of the country that would benefit from private utilities. The collaboration of state and private entities will also provide a unique approach that may change the way we view the role of the state.

BNDES will provide customized utility plans and will present the ideas to the government. The idea is to lower the budget and maximize efficiency in certain municipalities. The water industry is especially notorious for being wasteful and inefficient. With these plans, strategic infrastructure upgrades may also be necessary. BNDES already has budget ideas in mind for infrastructure projects.

In Brazil, private companies have more capital than public entities so investments will be ultimately beneficial. Private companies also tend to minimize waste since they are careful enough to make a profit. The water industry could certainly learn from private institutions on how to properly manage a budget.

The balance between state and private entities would ideally be nearly equal. Purely private or purely public monopolies would be detrimental to society. Planning the implementation of the role of government or private entities will efficiently provide services to the common person.